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Emerging Markets likely to benefit later in 2014 from stronger growth in U.S., Europe

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Emerging Markets likely to benefit later in 2014 from stronger growth in U.S., Europe

Drag from slowing China expected to be overcome.

Emerging markets are likely to benefit later in the year from stronger growth in the United States and Europe despite the current cloud cast by slowing economic growth in China and geopolitical risks elsewhere, according to the a new report from Standish Mellon Asset Management Company LLC, the Boston-based fixed income manager for BNY Mellon.

"In the U.S., we are beginning to see tentative signs of a pickup in economic data following a harsh winter."

"In the U.S., we are beginning to see tentative signs of a pickup in economic data following a harsh winter," said Thomas D. Higgins, chief economist and chief global strategist for Standish.  "In the euro zone, we have become slightly more optimistic given declining sovereign spreads in peripheral Europe and the possible freeing up of bank capital later this year after the European Central Bank's asset quality review."

Overall, Standish retained its forecast for global GDP at 3.5% for 2014 and 3.7% for 2015.

In the U.S., Standish credited a thaw from harsh winter weather in March to improvements in employment, retail sales and industrial production.   Standish lowered its forecast for 2014 first quarter growth to 1.5% from 2.0% due to a larger-than-expected trade gap in February.

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